Money & Banking

Tamilnad Mercantile Bank records 58% increase in FY20 net profit

Our Bureau Chennai | Updated on June 28, 2020

Loans to priority sector like agri, MSME, education up by 10.50%

Tamilnad Mercantile Bank Ltd has reported an impressive performance for 2019-20 with growth in profits and improvements in asset quality.

The bank recorded a 58 per cent increase in its net profit at ₹408 crore for the year ended March 31, 2020 when compared with ₹259 crore in the previous fiscal, on the back of higher operating profit.

The operating profit grew 13 per cent to ₹995 crore (₹884 crore in Q4 of FY19). The net interest income was higher at ₹1,320 crore (₹1,230 crore).

Interest Income increased by 7 per cent at ₹3,466 crore (₹3,224 crore), while non-interest income grew by 27 per cent to ₹526 crore as against ₹414 crore.

The company’s gross NPA declined to 3.62 per cent as of March 31, 2020 from 4.32 per cent as of March 31, 2019, while net NPA dropped to 1.80 per cent from 2.40 per cent. Provision coverage ratio of the Bank increased to 80.75 per cent (73.61 per cent in FY19).

Advances and deposits of the bank grew about five per cent each at ₹28,236 crore (₹27.018 crore in FY19) and ₹36,825 crore (₹35,136 crore) respectively. CASA grew 10 per cent at ₹9,518 crore (₹8,654 crore).

The Bank has been giving continued thrust on loans to priority sectors like agriculture, MSME, education and housing, constituting 68.49 per cent of its adjusted net bank credit, above the regulatory requirement of 40 per cent, according to a statement.

During FY20, loans to priority sector increased to ₹18,712 crore (₹16,934 crore in FY19), an increase of 10.50 per cent. Loans to agriculture sector stood at ₹6,994 crore, while credit to MSME sector grew by six per cent to ₹10,706 crore (₹10,083 crore).

During this fiscal, the bank is planning a slew of technology initiatives including setting up of 50 more e-lobbies, a stronger push for mobile and internet banking, among others, said KV Rama Moorthy, Managing Director and CEO of the bank.

Also, Tamilnad Mercantile Bank has disbursed 10,005 fresh loans for a total amount of ₹927.63 crore under Emergency Credit Line Guarantee Scheme (ECLGS) during the pandemic.

About 67 per cent of eligible accounts availed the moratorium announced under Covid-19 scheme.

Published on June 28, 2020

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